Return of Unearned Funds
Withdrawing from a Course or all your Classes will affect your Financial Aid
Before withdrawing or stopping attendance in classes, students should be aware of the proper procedure for withdrawing from classes and the consequences of withdrawing or stopping attendance. Official withdrawal is the responsibility of the student. Questions on Return of Title IV Funds may be addressed to any Financial Aid Office. Questions on withdrawal should be addressed with the Academic Advising Office.
Return of Title IV Financial Aid Funds Policy
Students receiving financial aid who withdraw or stop attending will, in most cases, be required to return a portion of financial aid received. The Higher Education Act, as reauthorized and signed into law on October 7, 1998, established the return of Title IV Funds Policy.
If a student attends through 60 percent of the term, all Title IV aid is considered earned. However, withdrawing will affect a student’s satisfactory academic progress and eligibility for additional financial aid.
Return to Title IV (R2T4) calculation – a required calculation to determine the amount of aid earned by the student when the student does not attend all days scheduled to complete within a payment period or term. (Student is considered to be a withdrawal, whether any credits were completed or not).
Overaward [not the same as a Return to Title IV calculation] – a required recalculation of Pell Grant and other types of aid types due to student dropping or not attending credits required for the status awarded (full-time, three-quarter time, half-time, less than half-time); required at any point when information is received that changes the student’s enrollment status. Reduction in aid will always be required for students whose status changes due to dropping classes and classes not attended.
Remember: Recalculation of aid for enrollment-status changes due to dropped or never attended classes is required before any Return to Title IV calculation is completed.
The Return to Title IV Process
- The first step is a series of formulas to determine the amount of aid which must be returned. Following the determination of the last date of attendance, the school must calculate the number of days attended and the total number of days the student was scheduled to complete within the term; weekends count and any periods of no classes which are five days in length or greater are excluded. Days attended are then divided by the days in the term the student was scheduled to complete to calculate percentage completed. The percentage is multiplied by total aid for which the student is eligible to determine the amount of aid earned (% completed x total aid = earned aid). Total aid – earned aid = unearned aid (aid to be returned).
- The next step is for the school to determine total institutional charges and multiply that figure by the percentage of unearned aid (100% - % completed = % unearned). It makes no difference which type of resource actually paid the school bill; the law assumes that Title IV aid goes first to pay the institutional charges. Institutional charges x % unearned = amount returned by school.
The school must then return the amount of unearned aid, up to the maximum received, to each of the Title IV programs in the following order:
• Unsubsidized Direct Stafford Loan
• Subsidized Direct Stafford Loan
• Direct PLUS Loan
• Federal Pell Grant
• Federal Supplemental Education Opportunity Grant (SEOG)
The school then calculates the amount for which the student is responsible by subtracting the amount returned by the school from the total amount which is unearned. That remaining amount is the student’s share and is allocated in the same order as above. Total amount unearned – amount returned by school = $ amount the student is required to return to Title IV funds.
• If a student does not complete the official withdrawal process, but stops attending, indicated by the receipt of all “F” failing grades or a combination of “W” withdrawals and “F” failing grades in all courses for the term in question, the College will perform a return of Title IV calculation by using the midpoint of the payment period as the withdrawal date unless a Last Date of Attendance is listed.
• This policy is separate from the institutional refund policy. Unpaid balances due to Hillsborough Community College that result from amounts returned to Title IV programs and other sources of aid will be charged back to the student. The student is also responsible for uncollected tuition to HCC.
• If a student does not begin attendance in all classes or ceases attendance during the 100% refund period, aid may have to be reduced to reflect appropriate enrollment status prior to calculating Return of Title IV Funds.